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Abacus 2018 Review


Abacus presented its annual review this week. As at 30 June 2018, Abacus Property Group had a total of $2.1 billion of property assets on the balance sheet. This total comprises the $1.5 billion commercial portfolio and the $666 million self storage portfolio. $650 million of Abacus’ $1.5 billion commercial portfolio is its co-investment ownership in a total of $1.8 billion of assets managed on behalf of third party capital.

2018 Highlights

  • 9% growth in funds from operations to $169.8 million

  • Return on Equity of 14.7% for 12 months to 30 June 2018

  • 3% growth in Distributions per security to 18.0 cents

  • 6.3% annual growth in underlying EPS to 31.7 cents since FY10

  • 8.5% growth in net tangible assets to $3.18 per security

  • 23.3% gearing

Strategy

Evolving in line with market cycles Going forward, Abacus’ overarching strategy is to invest capital in property opportunities to drive long term total returns and maximise securityholder value. Abacus' investment objective is to provide investors with reliable and increasing returns from property assets that are capable of providing strong and stable cash backed distributions and genuine potential for enhanced capital and income growth as a result of active asset management.

Abacus has refined its strategic direction giving prominence to sectors where they believe they have a competitive advantage. Abacus’ future capital allocation framework will focus heavily upon increasing exposure to the self storage and office markets while reducing exposure to retail and residential markets at this point in the cycle.

This strategy will target longer dated core plus office assets that they can develop into core assets that Abacus will hold for the longer term. Increasing exposure to these asset classes will enhance their ability to grow recurring revenue sources to maintain the Group’s targeted distribution growth rate of 2-3% pa.

Outlook

Abacus is targeting a distribution of 18.5 cps for FY19, a 3% increase on FY18 distributions per security and at the higher end of our stated distribution growth target

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